Letter from the Deputy Prime Minister to the Chair of the Board of Trustees of the IFRS Foundation

Mr. Erkki Liikanen
Chair, Board of Trustees
IFRS Foundation
Columbus Building
7 Westferry Circus
Canary Wharf
London, UK   E14 4HD

Dear Mr. Liikanen:

I am writing on behalf of the Government of Canada and a coalition of over 55 Canadian public and private institutions to express our support for the proposed International Sustainability Standards Board (ISSB) and to invite the Board of Trustees to locate the ISSB headquarters in Canada.

I commend the IFRS Foundation for its leadership and ambition in advancing the ISSB proposal. The development of global sustainability standards by the ISSB, within the robust governance structure of the IFRS Foundation, would help address the need for more consistent, comparable, and decision-useful reporting on climate change and other environmental, social, and governance factors. 

Canada is a committed partner in the global fight against climate change, demonstrating international leadership in implementing a robust carbon pricing system to complement our significant climate change investments that will build the foundation for a cleaner economic future.  Canada recognizes the importance of effective disclosures based on high-quality data in addressing climate change and nature degradation, improving opportunities for women, visible minorities, and other underrepresented groups, and enhancing public and private sector governance.  Canada is a reliable, multilateral partner dedicated to promoting sustainable outcomes that would be respectful of an organization whose objective is to develop global sustainability standards on behalf of over 140 member countries.

I support the IFRS Foundation's proposal to have the ISSB focus on climate reporting as an initial priority given the pressing need for investors to properly price climate-related financial risks and new investment opportunities, and for such work to leverage the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.  The Government of Canada has committed to move towards mandatory climate-related financial disclosures based on the TCFD recommendations, including for federal Crown corporations.  As the work on climate reporting becomes more advanced, I hope that the ISSB's focus would turn to developing standards for other sustainability factors, subject to its priority-setting processes.

Canada has the following attributes that make it a strong candidate to host the headquarters of the ISSB:

• Canada has a diverse and highly developed economy, and a multicultural society.  Canadian stakeholders represent a range of important economic, social, and governance perspectives.
• Canada has an established and well-respected accounting, auditing, and assurance profession, and deep, multi-sectoral expertise in law, capital markets, sustainable finance, and non-financial reporting. 
• Canada is a longstanding supporter of the IFRS Standards and has representatives on many international accounting and auditing standard-setting bodies.  Canada hosts the International Public Sector Accounting Standards Board.
• Canada is a trusted host to over 80 international organizations, including the International Civil Aviation Organization, the Secretariat of the Convention on Biological Diversity, and the World Anti-Doping Agency.  Canada also hosted the first secretariat of the International Organization of Securities Commissions from 1987 to 1999. 
• Canada's official languages are English and French. 
• Canada is centrally located among major IFRS regions and offers accessible direct air travel to key locations across the globe.  Canada's Eastern Time Zone bridges major international financial markets.  

In addition, Canada would be able to provide the following support for the IFRS Foundation to be able to establish this important and novel standard-setting body without delay:

• A broad coalition of Canadian public and private institutions would provide a significant 'Welcome Fund' to fully support the initial period of the ISSB's operations.  Consistent with the IFRS Foundation's spirit of transparency and accountability, this financial support would be broad based with no controlling interest and sources fully disclosed.
• CPA Canada, Canada's national accounting organization, would be able to provide interim office space as well as logistical and operational support.
• Federal and provincial governments and their agencies have a range of programs to support organizations seeking to locate in Canada, and stand ready to facilitate the establishment of the organization and support its staffing with the broad set of global professionals that it will need.

This offer is designed to ensure that there is no condition that would infringe on the IFRS Foundation's independence in the setting of standards.

I would like to thank you for considering Canada's invitation, and to express our highest levels of support and enthusiasm for the prospect of hosting the ISSB in Canada.  I have provided the list of supporting organizations in the accompanying Annex.

My officials, along with other key members of the Canadian coalition, are available to meet at your convenience, in recognition of the need to move expeditiously to establish the ISSB.

Sincerely,

The Honourable Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance